Last-minute
objections from the U.S. Government Accountability Office (GAO) are not
expected to derail NASA's long-awaited selection of a Crew Exploration Vehicle
(CEV) prime contractor.

In its
report, "NASA: Long-Term Commitment to and Investment in Space Exploration
Program Requires More Knowledge," the GAO says NASA's acquisition strategy for
the CEV program needs to be overhauled and it urges the U.S. space agency to
hold off on signing a long-term contract for the proposed space shuttle
replacement until 2008, the year NASA officials expect to commit to a
preliminary design for the CEV and have a better idea of what it will cost to
build.

NASA,
however, says it will be ready by September to conclude a deal for the design,
development and eventual production of the CEV and fully intends to do so.

"We do not
concur with GAO's recommendation that the NASA administrator modify the CEV acquisition
strategy," NASA spokesman Michael Braukus said July 27. "The agency's business
approach is consistent with the GAO's recommendation and NASA is confident that
its acquisition strategy and plans for selecting a CEV prime contractor are
based on a sound business case and are in the government's best interest."

Image Gallery: NASA's New Spaceship

VIDEO: A New Era of Space Exploration
Video animation of how NASA plans to get back to the Moon by 2018.

Bethesda,
Md.-based Lockheed Martin is competing
against the combined team of Northrop Grumman-Boeing for a CEV prime
contract expected to be worth billions of dollars. Both of those teams have
been under contract since last summer doing CEV concept development work for
NASA. Braukus said NASA is on track to pick a CEV contractor and award the
contract as soon as Aug. 31.

NASA
originally intended to keep two teams competing for the CEV prime contract
through 2008 and make a final selection based on the results of a prototype
flyoff. NASA Administrator Mike Griffin, after taking office last year,
scrapped the flyoff idea as unaffordable, and moved up the CEV prime contractor
selection well ahead of a preliminary design review currently slated for March
2008.

The
preliminary design review is a major program milestone intended to provide NASA
its first refined cost estimate before the detailed design work begins. Keeping
two teams under contract through the preliminary design review, NASA estimates,
would cost the agency an additional $2 billion.

Government
Accountability Office auditors worry that NASA is asking for trouble by
entering into a contract that would run at least through 2014 - and possibly
through 2019 - before developing "key elements of a sound business case,
including well-defined requirements, a preliminary design, mature technology,
and firm cost estimates."

"NASA's
current acquisition strategy for the CEV places the project at risk of
significant cost overruns, schedule delays, and performance shortfalls because
it commits the government to a long-term product development effort before establishing
a sound business case," the Government Accountability Office wrote in a 22-page
report released July 26.

Noting that
NASA intends to award a full CEV contract in September despite these warnings,
the report urges Congress to "consider restricting annual appropriations and
limiting NASA's obligations for the CEV project to only the amount of funding
necessary to support activities needed to successfully complete the project's
preliminary design review."

"GAO has
provided an important early-warning signal that all may not be well with NASA's
approach to implementing the exploration initiative," Gordon said in a
statement. "I think Congress needs to take a serious look at the issues GAO
raises. We have seen too many examples in recent years of government
programs that deviated significantly from their original cost, schedule, and
performance goals to ignore GAO's concerns."

Boehlert
said in a statement issued July 26 that he shared the GAO's concerns "about the
need to obtain full information before entering into long-term commitments" and
plans to hold a hearing this autumn on the issues raised in the report.
However, Boehlert gave no indication he intended to stand in the way of NASA
making a CEV contract award this summer, noting in the statement that he is
"eager to see NASA continue planning and designing the CEV."

In addition
to challenging NASA's CEV acquisition plans, the report also questions whether
NASA can really afford to return to the Moon by 2020 via the path it laid out
last year.